Amazon Launches Pharmacy Biz.
This is big: Amazon finally made the fully-fledged leap into the pharmacy business by launching online prescription fulfillment last week. Of course, Prime members will receive free drug delivery and prescription savings, which are easy synergies for the retail disruptor giant.
- Details: Amazon won’t deliver Schedule II substances (think painkillers, etc.) but it IS offering a variety of drugs including birth control and insulin. The announcement solidifies Amazon’s foothold into the pharmacy biz after years of slow but steady entry.
Big pharmacy stocks like CVS, Walgreens, and GoodRx were down significantly on the news – which is the so-called Amazon effect in full force once again (relentless.com, am I right).
Rise of the Digital Health Conglomerates.
Digital health deals are continuing at a rapid pace as the pandemic pushes investment into the space. According to Mercom Capital, 132 digital health companies were acquired in the first 9 months of 2020, and deals have only gotten bigger.
As digital health evolves, we’re seeing the emergence of the digital health conglomerate, meaning that these companies are starting to offer healthcare services along the continuum of care. In other words, these firms are not focused on one facet of healthcare anymore.
- The classic example here is newly formed Teladoc-Livongo, where the once pure-play telehealth firm now offers chronic disease management services, a clear synergy to its platform.
A new digital health conglomerate.
In healthcare’s latest SPAC deal, UpHealth and Cloudbreak are merging with blank-check company GigCapital2 to become the latest digital health conglomerate unicorn on the public markets.
- The new combination is a fascinating PROFITABLE play into telemedicine, patient care management, medical interpretation, prescription drugs, and more. This is a company I’ll be watching closely in the future.
- Follow along with me – the new stock ticker will be $UPH
More resources: read the investor presentation here.
Coronavirus updates.
The U.S. is averaging ~160k cases per day on a rolling 7-day basis coupled with ~90k hospitalizations and 1.4k deaths. We’ve experienced a recent downtick in these stats, but the overall trend remains upward. (Data)
- Capacity updates: Rural, Midwest hospitals are getting overrun, causing these facilities to send patients to urban hospitals. You can see how this unfortunately compounds. Hospitals are forced to cancel elective procedures as they experience surges in cases while also facing staffing shortages.
Vaccine updates: Moderna, Pfizer, and AstraZeneca applied for FDA emergency approval for their vaccine candidates. The FDA will approve the vaccines in early December (7th-9th) after reviewing the data. Here’s a handy summary of the three Covid vaccines.
According to Operation Warp Speed, the vaccines will be delivered to states based on total population and not outbreak risk.
- Special Delivery: The health care system is prepping for vaccine distribution, one of the biggest challenges remaining. Pharmacies are adding ultra-cool freezers and extra staff. Pfizer is piloting a distribution program in four states.
Quick Hits
Biz Hits
- Read this interview with Teladoc CEO Jason Gorevic and $TDOC’s plan for the next growth phase beyond the pandemic, integration with Livongo, and more.
- Sanford Health’s CEO was ousted after two decades this week.
- It’s a good (or maybe bad?) time to be a travel nurse: rates for nursing services are skyrocketing as hospitals face severe staffing shortages.
- Another SPAC: A former UnitedHealthcare exec is raising $300 million to bring home-care based biz’s to the public markets.
Policy Hits
- Trump announced two moves to lower drug prices – a most favored nation proposal, and the elimination of PBM rebates.
- The Trump admin also published significant reform to healthcare law staples Stark and anti-kickback statutes. The new rules make it easier for providers to enter value-based arrangements with hospitals and other entities, but opponents argue that the rules will result in more physician practice consolidation. Read more about the changes here.
- CMS just expanded its hospital-at-home program, an important step during a continuing pandemic.
- The surge in Medicaid enrollment is breaking state budgets, causing them to look for cuts. (Paywall – WSJ)
- A NY Post article alleges that states are overpaying for Medicaid by $100 billion by failing to check eligibility requirements.
Other Hits
- Pandemic is the word of the year.
- Alzheimer’s news: A growing pool of evidence seems to indicate that ‘Deep Sleep‘ protects against Alzheimer’s. Also this week – the first blood test to diagnose Alzheimer’s hit the market.
- Global flu infections are hitting record lows amid pandemic.
- A New AMA policy recognizes racism as a public health threat.
Thought-Provoking Editorials
- How to keep people engaged by emulating characteristics of video games. (Out of Pocket)
Healthy Muse Top Picks
- Read this scathing NY Times article which unveils the role that consulting firm McKinsey played in the opioid crisis – including their proposal to pay pharmacy companies a rebate every time someone overdosed on OxyContin.
- Read this transcript from one of my favorite podcasts, Invest like the Best. The episode discusses the future of healthcare and how value can get unlocked in our gridlocked system.
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